Almost all distributors run into contract issues on a regular basis, including issues arising out of the classic reference of a “battle of the forms”
— where no master or framework agreement exists and
disputes arise about what terms and conditions govern a
party’s relationship. A typical battle of the forms occurs
when a customer places a purchase order and the distri­
butor sends a confirmation or acknowledgement, but each
contain fine print or boiler plate terms and conditions
that contain substantially differing terms or conditions.

Hence, when a goods purchase transaction goes awry, anoften litigated question is: Exactly what are the terms ofengagement? In other words, what are the specific termsand conditions of the “goods purchase contract?”The answer to this question is tied up in a version ofthe 1952 Uniform Commercial Code (UCC). The UCC isapplicable to a distributor’s dispute, the United NationsConvention on Contracts for the International Sale ofGoods (CISG) — which I discussed in the Jan/Feb 2016issue of ID — and the common law, to the extent theUCC as a business that deals in goods of the kind or other­wise holds itself out by occupation as having knowledgeor skill peculiar to the practices or goods involved in thesubject transaction. At common law, the “mirror imagerule” controlled the answer to the question of the battleof the forms — if one party made a contractual offer, andthe other accepted, then a meeting of the minds existedand a contract was formed. Whether in writing or orally.The mirror image rule still has some applicability, but onlyif not involving merchants — as such, distributors shouldbe cautious not to lose sight of how the disputes can beavoided.

What Distributors Can Do To Maximize
Their Protection

• Integrated contracts control: As to any goods trans­
action of any significance, a framework agreement
should be executed detailing the “rules of engage­
ment,” so disputes can be avoided. Among many
aspects of such agreements, the applicability of any
terms and conditions inconsistent with the framework
agreement in subsequent paperwork — purchase
orders, quotations, acknowledgements, confirmations
and acceptance documents — should be disclaimed and
deemed not to have any legal force and/or effect. That
is, no meeting of the minds as to subsequent “contract
documents.”